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Avocado has received a special order for 2,400 units of its product at a special price. The product normally sells for $440 and has the following manufacturing costs: Per unit Direct materials $126 Direct labor 88 Variable manufacturing overhead 65 Fixed manufacturing overhead 111 Unit cost $390 Assume that Avocado has sufficient capacity to fill the order. What special order price should Avocado charge to make a $26,400 incremental profit?

Avocado has received a special order for 2,400 units of its product at a special price. The product normally sells for $440 and has the following manufacturing costs: Per unit Direct materials $126 Direct labor 88 Variable manufacturing overhead 65 Fixed manufacturing overhead 111 Unit cost $390 Assume that Avocado has sufficient capacity to fill the order. What special order price should Avocado charge to make a $26,400 incremental profit?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Avocado has received a special order for 2,400 units of its product at a special price. The product normally sells for $440 and has the following manufacturing costs: Per unit Direct materials $126 Direct labor 88 Variable manufacturing overhead 65 Fixed manufacturing overhead 111 Unit cost $390 Assume that Avocado has sufficient capacity to fill the order. What special order price should Avocado charge to make a $26,400 incremental profit? Multiple Choice $290 $440 $390 $279
Transcribed Image Text:Avocado has received a special order for 2,400 units of its product at a special price. The product normally sells for $440 and has the following manufacturing costs: Per unit Direct materials $126 Direct labor 88 Variable manufacturing overhead 65 Fixed manufacturing overhead 111 Unit cost $390 Assume that Avocado has sufficient capacity to fill the order. What special order price should Avocado charge to make a $26,400 incremental profit? Multiple Choice $290 $440 $390 $279
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